The Davy Digest - 28th April 2025

US equities and bonds rose last week, driven by positive reports on trade negotiations and a softening of the rhetoric surrounding the tenure of the Federal Reserve Chair. Preliminary Purchasing Manager Index (PMI) surveys were released for April across the US, UK, and Eurozone. In the US and Eurozone, Manufacturing PMIs increased from their previous print and were above consensus, while Services PMIs disappointed in both regions. In the UK, both the manufacturing and services readings came in below expectations. However, Retail Sales data surprised positively in the UK, increasing by 2.6% over the last year. Finally, in Japan, inflation data continued to support ongoing interest rate hikes, with Tokyo CPI coming in at 3.5% year-on-year – the highest level in over two years.

Last week's highlights

	US Manufacturing Flash PMI (23/04) – Increased to 50.7, above consensus. US Services Flash PMI (23/04) – Decreased to 51.4, below consensus.
	Eurozone Manufacturing Flash PMI (23/04) – Increased to 48.7, above consensus. Eurozone Services Flash PMI (23/04) – Decreased to 49.7, below consensus.
	UK Manufacturing Flash PMI (23/04) – Decreased to 44, in line with consensus. UK Services Flash PMI (23/04) – Decreased to 48.9, below consensus. UK Retail Sales (25/04) – Increased to 2.6% year-on-year in March, higher than consensus.
	People’s Bank of China Meeting (21/04) – Kept rates at 3.1%, as expected. Tokyo CPI (24/04) – Increased to 3.5% year-on-year during April.

This week, a large amount of April jobs data will be released in the US, beginning with Job Openings on Tuesday and finishing with Nonfarm Payrolls and Unemployment data on Friday. Additionally, the Federal Reserve’s preferred inflation measure – Core Personal Consumption Expenditures – will be released on Wednesday as well as a preliminary estimate of Q1 Gross Domestic Product. In the Eurozone, Consumer Confidence will be closely watched on Tuesday as an ongoing measure of sentiment. Later in the week, we will see a preliminary reading for Q1 Gross Domestic Product, as well as an inflation print for April. In Asia, the headline event will be Thursday’s Bank of Japan meeting.

What's on the radar

	Preliminary Q1 Gross Domestic Product (30/04) Inflation – Personal Consumption Expenditure (30/04) Nonfarm Payrolls and Unemployment (02/05)
	Eurozone Consumer Confidence (29/04) Eurozone Preliminary Q1 GDP (30/04) Eurozone Inflation (02/05)
	Bank of England Quarterly Bulletin (30/04)
	China Caixin Manufacturing PMI (30/04) Bank of Japan Meeting (01/05)

Chart of the moment

Catching up

Source: FactSet as of 21/04/2025. The Magnificent Seven refers to Apple, Amazon, Meta, Alphabet, Tesla, Nvidia and Microsoft.

• With earnings season well underway in the US, the performance of the Magnificent Seven relative to the other 493 companies in the S&P 500 remains in focus.
• Analysts expect earnings growth from the Magnificent Seven companies to slow down from levels seen in 2023 and 2024.
• Meanwhile, the remaining companies in the index are forecast to see an acceleration of earnings growth through 2025 and 2026.
• This trend should help support the outperformance of names outside of Mega-cap tech in the US.